co-founded by brothers Ani and Ayan Sanyal, Calcutta Chai Want to be America’s “place to buy good firewood.” It’s a big market. The Sanyal brothers estimate that the national tea market is worth $12.7 billion annually.
To catch up with it, the duo told TechCrunch that Kolkata is about to start a new chapter in its business: After spending years generating revenue from the agency business, Calcutta Chai is accepting outside capital for the first time.
The startup has recently joined forces including Boba Guys founders Andrew Chau and Bin Chen, 500 Startups partners Paul Singh, Sharma Brands CEO Nik Sharma, Immi Eats CEO Kevin Lee and Vice Media co-founders Suroosh Alvi and Zanab. Investors within the company raised a $1 million seed round. Hussein Alvi.
There are easier ways to build a business than trying to destroy a cup of Indian masala chai. The drink is very personal: no two households will serve the same cup, and everyone has their own preference for the ratio of ginger to cardamom.
But chai demands technology, and it’s also loved: it’s the dominant and shared language in Indian culture. So, given its cultural significance, coupled with the growing popularity of chai in the West, it’s no surprise that a range of direct-to-consumer businesses have launched their own masala chai mixes, bottled drinks and cafes.
The decision to take the risk in Kolkata seems like a controversial choice these days, especially for community growth businesses with a passion for users. Will quality struggle with risk-like incentives? Does chai have to be watered down? Calcutta Chai started out as a place in New York, based on the Sanyal brothers’ trips to Calcutta each summer. It bills itself as serious about authenticity, so any threat to that ethos could hurt the business.
“You can bootstrap as much as you want, with certain limitations,” Ani Sanyal told TechCrunch. “After two years of navigating COVID-19, we’ve exhausted all possible avenues; Funding is intentional.”
In fact, the startup said it intends to cobble together a new round of funding from high-net-worth individuals in the form of party rounds rather than traditional venture funds or funds. The reason, Sanyal continued, is that they want “patient capital.”
Instead of going the crowdfunding route, Kolkata Chai has selected key executives and founders in the industry who understand the food and beverage space, from whom they can learn more, including budgets. Ayan Sanyal added that the startup wants to wait until the business grows to a point where they are willing to share future plans and see what the long-term revenue mix might look like.
(The Kolkata journey feels similar to Boba Guys, a popular tea brand that also eschews traditional venture capital.)
Kolkata Chai hopes the money will help it grow from a proof-of-concept business to a brand to be reckoned with. In the first nine months, the startup’s DTC business generated about $160,000 in revenue and helped it build a profitable business during the pandemic. Based on this, Kolkata believes that its future is more in the field of e-commerce. It will keep its New York store and use pop-ups as a marketing tool.
Ultimately, the brothers said, the company could expand through acquisitions and even grow by expanding the content and media of its initial audience. Although the brand started out teaching people that “chai tea” is a repetitive description that Starbucks continues, it wants to continue with a spicier stance.
“We built a top-notch brand for millennials and our demographic with very few resources,” says Sanyal. “I think we can really get across all these different worlds and, more importantly, not just [build] Products and items for the people of South Asia, but really a bridge between our culture and the greater Western world. “
Photo credit: Nushrat Choudhury
